Individual and family health insurance is available through private insurance companies as well as State and Federal marketplaces. Given the option, most people would prefer to have their employer provide…

Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis…

The yearly period when people can enroll in a health insurance plan has ended. Even tho the open enrollment for 2018 is over, you may still be able to enroll in a Marketplace health insurance plan for 2018 if you qualify for a Special Enrollment Period. ... Job-based plans may have different Open Enrollment Periods.

In most cases, you would need to wait until the next Open Enrollment period starts on November 1, 2018 to change your health insurance plan or enroll in a new one. However, even after Open Enrollment has ended, there are some ways to still get health insurance coverage. You MAY qualify for a Special Enrollment Period if you've had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child. If you qualify for an SEP, you have up to 60 days following the event to enroll in a plan.

Fees/Penalties

2017/2018

For tax year 2017, the penalty is 2.5% of your total household adjusted gross income, or $695 per adult and $347.50 per child, up to a maximum of $2,085. For tax year 2018 and beyond, the penalty amounts have not been announced, but are expected to increase.

How To Pay the Fees

You’ll pay the fee on the federal income tax return you file for the year you don’t have coverage. Most people will file their 2017 returns in early 2018 and their 2018 returns in early 2019.

For Employers....

Employer mandate

Under the Affordable Care Act’s Employer Shared Responsibility (the “employer mandate”), an ALE may be subject to a penalty if it does not offer to at least 95% of full-time employees coverage that is “affordable” and provides at least “minimum value” (i.e., actuarial value of at least 60%). The ACA provides that coverage is affordable if the employee cost for the lowest-priced self-only coverage available is not more than 9.5% (indexed annually) of the employee’s household income. Regulations allow affordability to be up to 9.5% (indexed) of one of three optional safe harbors, since employers will not actually know each employee’s household income. The three safe harbors are: 1) W-2 method, 2) Rate-of-Pay, and 3) Federal Poverty Line.

For example, the maximum employee contribution for 2018 is $96.08 using the Federal Poverty Line (FPL) safe harbor. This is calculated by multiplying the most current FPL ($12,060 for 2017) by the affordability percentage (9.56% for 2018).

Penalties for Employers that do not offer coverage in 2018

The 9.5% threshold in 2014 increased to 9.56% in 2015, 9.66% in 2016, and 9.69% in 2017. This decrease to 9.56% in 2018 is a reversal from the increases in prior years. This is because the affordability percentage is indexed based on the excess of the rate of premium growth for the preceding calendar year over the rate of income growth for the preceding calendar year. (See Code § 36B(c)(2)(C)(iv) and (b)(3)(A)(ii).)

The two potential employer mandate penalties are the “A” penalty and the “B” penalty, so called because they apply under Code § 4980H(a) or Code § 4980H(b). An employer will not be subject to either of the two potential penalties unless at least one full-time employee receives a subsidy and buys health insurance in the Health Insurance Marketplace/ Exchange.

“A” penalty – applies if an employer does not offer at least “minimum essential coverage” (MEC) to at least 95% of full-time employees, and at least one full-time employee buys health insurance in the Marketplace and receives a subsidy. The original penalty amount in 2015 was $177.33/month times the total number of full-time employees the employer had in that month (minus 30 employees), times 12 for the entire year. (12 x $177.33 is $2,080.). The 2018 amount will be $2,320 ($193.33/month).

“B” penalty – applies if an employer offers coverage to employees, but for one or more full-time employees the coverage is either not “affordable” or does not meet “minimum value.” The original penalty amount in 2015 was $260/month for each full-time employee for whom coverage was either not affordable or did not provide at least minimum value. (12 x $260 = $3,120). An important difference from the “A” penalty is that the “B” penalty calculation does not include all full-time employees, but only those for whom coverage is either not affordable or does not provide at least minimum value. Additionally, the “B” penalty cannot be more than the “A” penalty would have been if it applied. The 2018 amount will be $3,480 ($290/month)..

What’s coming in the Future….

Cadillac Tax

As part of the recent deal to reopen government, two important ACA changes were made that affect employers:

Cadillac tax has been delayed for 2 more years until 2022.

This unpopular tax on high cost health coverage (40% tax on the value of coverage over specified thresholds) had already been pushed out – and now it is being pushed out again. Take a breather but start thinking about cost containment strategies to avoid this tax when it does go into effect.

Health Insurer tax has been suspended for 2019.

This health insurance “provider fee” is tax levied on the health insurers based on the premiums they collect – this cost would most likely be passed on to consumers. It was suspended for 2017, came back for 2018 and is now suspended again for 2019 – good news for employers that purchase insurance coverage since it will most likely mitigate insurance premium increases for 2019 renewals.